News & Insights

January 14, 2020

New KYC and Registry Notification Requirements: Are you Ready?

  • Sam Sheen
    Sam Sheen Financial Crime Adviser

IN BRIEF:

  • Following on from EFI’s response to the Companies House consultation in August 2020, new requirements have been introduced setting out the requirements for checking registry information in relation to legal entities, their owners and controllers.
  • The new requirements mean that entities regulated by the UK’s Money Laundering Regulations will have to incorporate registry records verification and retention of this information as part of their KYC processes.
  • Mandatory discrepancy notification requirements will also add an additional regulatory obligation that financial institutions will need to operationalise and consider how to treat those customers whose existing CDD is inconsistent with information found on the Companies House Registry.

January 15, 2020

Psychics, Cages and Scammers

IN BRIEF:

  • By now most of us have heard about scams designed to take advantage of vulnerable customers, manipulating them to part with their hard-earned savings. Some of these involve marriage proposals, requests for emergency funds or donations to bogus charities. All of these are collectively referred to as social engineering scams (“Scams”).
  • From a CDD perspective, what I find most striking in this case is the risk management tactics used by the scammers and CanadaCo to avoid detection, maintain cash flows and create the illusion of ordinary business activity.
  • Not only did they think ahead and plot out ways in which to muddy the trail of their mailing activities, they monitored account activity and re-assessed the risks that some types of customers might pose to the Scam’s longevity.
  • Sam Sheen
    Sam Sheen Financial Crime Adviser

October 30, 2019

DAC 6 and the D Hallmarks

IN BRIEF:

  • HMRC’s consultation period for DAC 6 ended on 11 October. Professional service providers, including EFI, and leading UK bodies representing the financial services industry have responded to the consultation.
  • Due to the short timeframes until the reporting regime commences in 2020 and to achieve compliance within the provisions of DAC 6, Promoters, Service Providers and Intermediaries affected need to assess the business impact of this legislation
  • It is understood that many Financial Institutions (“FIs”) are adopting a “wait and see” approach until the publication of HMRC guidance. This is in the hope that they will be considered Service Providers and not Intermediaries.

September 24, 2019

EFI – Northern Powerhouse Announcement

IN BRIEF:

  • EFI, which partners with large corporate and retail banking clients across the UK and Europe to deliver financial crime prevention and efficient operational support, has been accepted as a member of the Government’s Northern Powerhouse Partnership Programme. Demonstrating its commitment to promoting the strengths of the North and supporting the Northern economy and Northern Powerhouse initiative.
  • Since launching in 2017, EFI has grown substantially, with a presence in both the UK and mainland Europe, the majority of EFI’s team will now be based in Leeds. EFI is planning to invest in growth further, recruiting up to 50 additional staff, in order to fulfil its ambition of becoming an industry leader in the Managed Services Operations sector, and a robust Northern Powerhouse Partner.

August 6, 2019

Corporate Transparency and Register Reform

  • Sam Sheen
    Sam Sheen Financial Crime Adviser

IN BRIEF:

  • The Companies House registry (Register) is an important source of information referred to by EFI and its customers in the undertaking of KYC and CDD. This information is vital for agencies such as HM Revenue & Customs and the Serious Fraud Office when they investigate financial crime cases that involve the misuse of corporate structures.
  • Detecting and preventing financial crime therefore relies upon the ability to undertake timely enquiries about companies and individuals associated with them, with confidence that the information found is accurate and complete.
  • EFI welcomes Companies House’s commitment in working to seek ways to strengthen the UK’s ability to fight economic crime. The following comments are in response to some of consultation’s questions.

July 24, 2019

Whitepaper – The End of the beginning for FATCA and CRS

IN BRIEF:

  • Governments globally have been clamping down on tax avoidance and evasion for some years by introducing various international tax transparency measures to detect and deter such activity.
  • FIs are continually challenged by a huge and ever-changing regulatory environment, compounded by significant levels of uncertainty in the assessment of compliance by a whole raft of different tax authorities.
  • In September 2017, under FATCA and CRS, the largest ever exchange of tax information took place between Revenue Authorities globally.

July 17, 2019

The Case of the Disappearing Bank

  • Sam Sheen
    Sam Sheen Financial Crime Adviser

IN BRIEF:

  • For several years now, anti-financial crime (AFC) regulations have prohibited the operation of shell banks. A shell bank is a bank that has no physical presence in the jurisdiction where it is incorporated or licensed and no affiliation with a regulated financial group.
  • A trust does not have a “legal personality”. This means it cannot legally own assets. A trust can’t open its own bank account, execute contracts or become a shareholder in a company.
  • The TCSP acts as trustee for the Manolo Trust. Not a great deal of information is provided about how the trust came to be created.

This article has been featured on the International Banker

September 26, 2018

Jail time looms for FATCA Responsible Officer

IN BRIEF:

  • After witnessing the first ever successful US prosecution for Foreign Account Tax Compliance Act (FATCA) non-compliance, banks and Financial Institutions (FIs) will be thinking ‘What next?’ and considering their own FATCA programmes.
  • Events last week only serve to confirm that FIs are under the microscope. Organisations and individuals will be taken to task for non-compliance or deliberate avoidance.
  • The high level of international collaboration between a large number of cross-border agencies (including the City of London police and the FCA) is of particular note. International cooperation and effort will seamlessly result in successful prosecutions.

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